Disney’s Attempted Purchase of 2st Century Fox Film & TV, As Explained By a Comics Nerd

The above takeaway is all you might want to know about CNBC’s bombshell? stunning? overblown? report that Disney recently spoke to 21st Century Fox about potentially acquiring the company’s film (key franchises = X-Men, Alien, Kingsman) and TV divisions (including FX and National Geographic). Fox Sports and Fox News would not be part of the deal since Rupert Murdoch is reportedly more interested in pivoting toward primarily focusing on news and sports, and holding on to Fox News is central to that strategy.

If this were to happen Marvel’s major properties would finally all be under the same roof. Well, almost. Technically, Sony still owns everything Spider-Man-related are just loaning him to Marvel Studios for the Homecoming movies. However, that’s more than you can say for the X-Men right now, who are off on their own fractured adventures spread throughout various Fox movies and TV shows. A Disney buyout would change all of that and cause a seismic shift. The decades-long era of Hollywood having six big film studios would end. It’d be down to just five, with Disney turned into an even bigger behemoth than before.

But this actually has very little to do with Marvel or superhero movies. That’s just a side effect. Instead, this is likely 100% about Netflix, at least from Disney’s point of view. As pointed out by THR, “Disney’s need for content, meanwhile, has never been greater, given the streaming business it is creating with its acquisition of BAMTech in August is meant to go head-to-head with Netflix. Disney, in fact, is pulling its Pixar and Disney-branded content from Netflix so that consumers desiring those shows and movies will have the incentive to subscribe to Disney’s upcoming service, which will also include Marvel and Star Wars product and could conceivably add movies and shows from Fox at a later date.”

Purchasing Fox would turn Disney’s forthcoming Netflix competitor from a mere nuisance to a legitimate threat if it wasn’t already. Or at least that would be the goal.

There are, inevitably, complications. Disney can’t actually purchase Fox’s broadcast channel since it already owns ABC. That’s an FCC no-no. Then again, there have been whispers of Disney prepping ABC for a sale. So, who knows. And Fox is already in the middle of talks to complete its purchase of Sky TV. What happens to that now?

Well, nothing yet. CNBC’s report indicates Disney and Fox’s talks have already cooled off and are dead for now. Recent years have brought similar reports of proposed takeovers that never took hold, like all the “China’s going to buy Paramount” or “Disney’s going to buy Netflix” rumors not to mention Rupert Murdoch’s very real effort to purchase Time Warner, a company which years later sold to AT&T instead (if the DOJ doesn’t block the deal, that is). However, sometimes these deals can come back, making this a story to keep an eye on.

It’s long been predicted that the diminishing returns in the film industry combined with the influx of new money from aggressive digital companies with more tech-based approaches to doing things are going to lead to a period of great contraction. Some film studios aren’t going to survive, or so the thinking has gone. The most likely candidates to fall or sell off were The Weinstein Co. (which was already in dire straits prior to the sex abuse scandal), Paramount and Sony. That Fox would even entertain a sale, mere years removed from leading the industry in market share, indicates the situation might be more fluid than we realize. Or, perhaps, Disney is just really freakin’ serious about making its own Netflix. As a result, the once impossible is now on the table: The Avengers and the X-Men might someday share the screen.

The strange thing is Fox is actually setting the new model for how to take on Marvel Studios in the comic book game. Rather than lazily cut corners in a half-assed imitation of the Marvel Cinematic Universe, like what WB’s first tried with its DCEU, Fox has been spinning off its X-Men properties into compelling new directions, with main continuity movies (Apocalypse last year, Dark Phoenix next year), unique, standalone spin-offs (Deadpool, Logan), a new horror-themed line (New Mutants) and TV shows that are free to be as strange (Legion) or conventional (The Gifted) as they want to be.

At the very least, unlike Disney, they’re not currently blacklisting film reviewers from newspapers they don’t like. The thought of Fox’s X-Men strategy possibly coming to an end due to a corporate takeover seems counterproductive. Maybe Disney would just leave them alone. Or, maybe, like Homecoming all prior continuity would be wiped out in favor of starting over with a Disney-branded X-Men.

For now, it’s all just speculation. This brief powwow between two giants might amount to little more than corporate foreplay. But if something does actually come of this what would you want to see happen with the X-Men?

Posted by Kelly Konda

Grew up obsessing over movies and TV shows. Worked in a video store. Minored in film at college because my college didn't offer a film major. Worked in academia for a while. Have been freelance writing and running this blog since 2013.

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24 Comments

I honestly couldn’t care less about the X-men. I want the Fantastic Four rights back with Marvel, no matter how. And if Fox and Disney are already talking with each other, who knows what the result will be.

I have to disagree with you slightly about Fox success…yes, they have found their own niche and Deadpool was in terms of revenue the most successful movie of last year. But they don’t really compete with Marvel, they are more going of the way and doing something different, which doesn’t have the same box office numbers Marvel has, but does well enough to fill Fox’s pockets quite nicely.

I understand your point about Fox. You seem to be saying that they’re not really in direct competition since what they do is so much different and the piece of the pie they seek so much smaller. However, doesn’t that still play into my point? Fox’s survival instinct in the industry’s ongoing war with Marvel Studios is to simply carve out its own niche and learn to be comfortable with finishing in third place, financially, but second and in some cases first critically. But that’s only after it tried to do an Avengers-like thing with Days of Future Past and realized $1 billion worldwide can’t be formulaed into existence. They learned the only way to really compete with Marvel Studios is to stop actually trying to compete and instead do something to differentiate yourself from the crowd. I don’t know what happens to that if Disney takes over. Logan doesn’t feel like a movie Disney would greenlight.

BTW, at this point I feel like Fox would just sell the Fantastic Four back to Marvel outright, regardless of any kind of larger corporate merger. It’s an IP they don’t know what to do with, it doesn’t fit into their plans anymore, and if they don’t make another one in a couple of years they’ll probably lose the rights anyway.

Fox should and I hope that they will, regardless of the notion of a merger.

I think what Disney needs is another studio anyway. If we assume that the purchase of Fox was about filling their streaming service, well, let’s look what Disney actually owns at this point. On the TV side of things they are pretty well set. Between their ABC output and Marvel Netflix (which are at the end of the day still Disney owned properties), they have a little bit of everything, for every age group. In terms of Documentaries they have their whole Disney nature series. But in terms of movies there is a big hole, because Disney and Marvel both cover family friendly entertainment. Sure, there are some Touchstone projects on top of it, but those rights tend to be a little bit more complicated, and there aren’t that many overall. So what Disney needs is a studio which would try to do the out of the box stuff – or even better has already done it. Purchasing part of Fox wouldn’t remove the need to produce more in this direction.

The need for this specific kind of content might be the reason why Disney made the offer to Fox and not to Sony.

I get why Disney wants Fox. Paramount and Sony are the two more likely studios to sell, but neither are particularly desirable right now. You’re buying low on either of them. Fox is the more desirable partnership because it has built itself up to be something someone would genuinely want and thus pay big bucks for (everything Disney is asking for from Fox is currently valued at $20 billion). What I don’t completely get is why Murdoch would actually want to sell. He’s always been more the corporate raider type, not the one to be raided.

Since I wrote the article, THR put forth this possible rationale behind the currently-just-hypothetical sale:

“Rupert Murdoch, the co-executive chairman, has traditionally been seen as an acquirer, but the notion he’d even pursue such a large sale of assets is a sign that his sons, who have become the key faces and voices of the company, are more willing to let go of certain pieces.”

Other higher-ups at Fox have also made relatively recent comments indicating an increasingly large amount of their revenue comes from sports and news. Still, this would make Murdoch’s company smaller, not bigger, and would seem to offer more long term benefit to Disney than him.

Who knows what is going on behind the scenes…Murdoch always seems to be uber-powerful, but if you just keep acquiring, you can get to a point at which your company as a whole becomes kind of messy. And the movie making business is particularly risky.
Plus, Murdoch is more a news person than an entertainment person. I always got the impression that the main reason he took on the film studios was due to preserving the legacy being a good advertising.

And if I look at the assets they own….ie they bought out Sky, but I doubt that they really have that much fun with it on the German market. On the one hand, Germans aren’t really into pay-tv (I am pretty sure without the football rights – and Skye really has to pay a lot for those – Skye would have gone down by now), on the other hand the media rules in Germany make it really, really difficult for Murdoch to turn the whole venture into a propaganda channel.

On the other hand though, the writing is at the wall….I don’t think that the traditional channels will be able to keep up that much longer. The US is shifting towards streaming services, which makes the only thing people want to watch live news and sports. So either you jump into the whole streaming service business with an offer on your own, or you take a step back and focus on news and sports. I have the feeling that Murdoch would prefer to do the latter.

“The US is shifting towards streaming services, which makes the only thing people want to watch live news and sports. So either you jump into the whole streaming service business with an offer on your own, or you take a step back and focus on news and sports. I have the feeling that Murdoch would prefer to do the latter.”

In which case this deal looks like both Disney and Fox trying to proactively prepare for and shift into the future. Disney has the tech and motivation to take on Netflix and adopt a streaming strategy, Fox seems more inclined to pivot toward that which is supposedly streaming-immune (shift) as well as that which Murdoch has always seemed more passionate about anyway: morphing news to fit his right-wing worldview.

It’s just that Murdoch has been such an aggressive corporate, well, asshole for so long the notion of him scaling down is a bit of a swerve, even if it’s coldly logical from an assets and P&L point of view. Maybe the long, long, loooooong time it’s taking for him to buy all of Sky has soured him on the old way of doing things.

Well, he sold stuff to Disney in the past didn’t he? Or did the sale of Freeform happen before he had the control?

Maybe….as I say, I think Sky might have not been worth the effort, at least not in terms of the German market.

Or his sons simply have a different approach. After all focussing on their strength has worked pretty well for the company, while the acquisition of stuff didn’t necessarily work out that well. I don’t think that Fox has a serious shot to be ever mentioned in one breath with Disney and Time Warner. Murdoch might even back out of the challenge for exactly that reason, because he can’t stand to be constantly second best.

“Well, he sold stuff to Disney in the past didn’t he? Or did the sale of Freeform happen before he had the control?”

Good memory. I’d forgotten Freeform/aka ABC Family used to be Fox Kids, but you’re right. That was a troubled asset Murdoch sold off to Disney, or at the very least it happened under his watch.

“Murdoch might even back out of the challenge for exactly that reason, because he can’t stand to be constantly second best.”

Maybe Bob Iger needs to do what foreign leaders have to do with Trump, then. Maybe he needs to flatter Murdoch endlessly, make it seem like the old Aussie is really getting the best of him in this deal.

I kid, I kid. But, no, seriously with everything that’s happened at Fox News recently it does seem more like Rupert’s kids are taking charge. Convincing dear old dad to OK the sell off of their film and (most of their) TV assets would obviously be their biggest move yet. It’s on the table now. Whether anything ever comes of it is another thing, and even it does it could be years before it’s approved based on how long the At&T and Time Warner merger is taking.

Most likely you are right. But then, the timing might be perfect for Marvel…the Fantastic 4 rights might revert back earlier anyway, and the whole X-men block, well, let’s put it this way: The MCU will end one day. It will be a sad day when it happens, but that is the way of things. And when it happens, Marvel Studios will need to do something else. They can hardly just restart the MCU, but they can for a while do stand-alone movies….or they can do the X-men. Hell, even if the MCU is still going on by the time they get those rights, they will still have the option to create a parallel franchise.

“The MCU will end one day. It will be a sad day when it happens, but that is the way of things.”

You bite your tongue. The MCU will never die. You hear me. Never!

Yeah. No. You’re right. Even if you’re not, gaining control of FF and X-Men would definitely give Marvel more options – parallel franchise, a new thing to turn to if the MCU loses steam, fodder for perhaps some original Marvel TV shows for their Netflix killer.

Well, I certainly hope so…I mean, Pixar has managed to keep up quality for over 20 years and I am sure the MCU has it in it to repeat that feat. I am sure it has at the very least 10 additional years in it. Who knows, we might even get to see a second generation of Superheroes.

The MCU’s greatest enemy, in my mind, has been and will continue to be that long-dreaded, yet rarely observed possibility of comic book burnout. At some point, will the world do what so many comic book readers have been told to do by parents and loved ones over the years, i.e., “grow up, sell your comics, etc.” or will the steady churn of superhero movies and TV shows continue to be seen as acceptable, yes, but more importantly non-boring entertainment? How long can the comic book movie continue to reinvent itself just enough to stay viable? At the moment, there seems to be no end in sight, but audience tastes can change so rapidly with little warning.

That’s a long, long, looooong term concern, though. Here in 2017, the year of Logan and Wonder Woman and two different MCU movies that made nearly $900m worldwide and a third about to join them, the future is so bright they have to wear shades. Even Justice League is tracking to be not a complete and total embarrassment right now, which, really, is a small victory unto itself.

A genre which has so much room for reinvention doesn’t just vanish. At the end of the day Comic Book movies can draw from a lot of untapped material….honestly, I wish more studio executives would stop green-lighting remakes and instead hit the books again for good material. Worked for TV. Game of Thrones, Outlander, some of the biggest successes in the last years are based on book series.

I agree. The point is more that I don’t see the MCU’s hypothetical end being caused by something they do, persay, but more due to a potential wider industry and cultural trend. For now, though, Logan, New Mutants, Guardians, even Ragnarok are stretching the definition of comic book movie, and despite the CW’s superhero block interesting, non-superhero comic book adaptations abound everywhere on TV.

Honestly, I am more worried that they will eventually run out of properties to adapt. The Marvel library is large, but not everything in it is good, a lot of stuff wasn’t successful or is fairly repetitive.

Fair point. Guardians has probably given me the false impression that they can more or less pull little-known properties out of their ass and turn them into gold for far longer than you’d think possible. It worked the one time, sure, but it’s not a trick they’ve repeated since (Ant-Man, Doctor Strange, risky, yes, but still way more known than Guardians pre-release) and adaptable properties wear out eventually.

If only some other company had a huge roster of adaptable Marvel characters, and was run by someone who might need to sell since recent world events outside his control have upset his money flow (THR says Murdoch might want to sell because recent Saudi arrests have cut into his money). Gosh, were such a hypothetical situation to arise it could be the long term answer they need.

Lol!!! Marvel is actually running out by phase 5 if they don’t get their properties back…I mean, they can certainly continue the GotG indefinitely as long as they keep adding fun characters, but the earth-bound properties….there are still the legacy characters and the Young Avengers, but past that you already land pretty much in territories in which rights overlap with Fox. The only “big hitter” left is Namor (provided that they have managed to free him from legal limbo) and Blade (and I have the feeling that if they tackle him, he will be headed for TV).

Disney has made enough money from the Marvel films to recoup its spending. It can ease off from flogging a dead horse.
We’re already doomed to seeing a mediocre Star Wars film each year until the end of time (and substandard Star Wars Battlefront games produced annually by EA). I’m glad we don’t have to suffer from substandard Aliens films too

I don’t know. I thought Covenant was fairly sub-standard. [Then I remember Alien: Resurrection] Ok, it could have been worse.

I get your point and in some ways share it. I was trying with the article to focus on the Marvel angle and simply accept all of this as part of an inevitable industrial trend. But I don’t think Disney owning 20th Century Fox would be good for the industry. Disney already owns too much as it is. It seems like a pretty severe, industry-altering event all for the primary purpose of simply buying controllable content to be piped into their Netflix competitor.

I haven’t watched Alien Resurrection since I was disappointed at the cinema. I have owned it on DVD for a decade. It could indeed be a lot worse: Aliens vs Predator 3.

Does Disney really need to buy anything else to have a Netflix competitor? They have been around since 1923. They can easily have their equivalent of Turner Network with the classics. They could even have a channel full of the offensive racist stuff like “Songs of the South” for the alt-right families.

All cards on the table: I’ve never watched the AvP movies. At best, I’ve caught the first 5 minutes and then last 20 minutes of the first AvP on cable over the years. Never seen a single second of AvP 2. Not even a trailer. Given the director involved, I just knew they weren’t for me. But I kind of forget they even exist. So, Resurrection is not the low point, you’re right.

“hey could even have a channel full of the offensive racist stuff like “Songs of the South” for the alt-right families.”

Maybe they can get Papa Johns to co-sponsor that channel.

Yes, Disney’s library is massive, but it’d be so much more diverse if they had Fox’s library as well. Moreover, it’d also give them more diverse contemporary content to go along with their Pixar, Disney Animation, LucasFilms and Marvel movies.

You have a great point about diverse content. If families are forced to choose a single provider, it’s going to have to have something to satisfy everyone. Dad really would need Disney to get Fox Sports.

Actually, Fox Sports is not on the table right now. The original CNBC report indicates Disney is seeking the film studio, tv studio, and non-sports/news cable networks. Fox would hold on to, well, the Fox broadcast network since Disney can’t legally own two of them (unless they sell ABC first) and all of the various Fox sports and news networks. If it happens it will be because Rupert Murdoch’s sons have a different vision for the future of their dad’s company and see a bigger future in sports and news. Disney would be getting Fox’s 82 years worth of film history, everything FX has ever done, National Geographic, the rights to X-Men, Fantastic Four, Planet of the Apes, Independence Day, Avatar, Aliens, Rio, Die Hard, Ice Age, Trolls and so on. Fox also used to have a distribution deal with DreamWorks Animation, but Universal bought that company meaning Fox’s only animated movies now have to be made in-house.

Even without the sports and news, though, all of that gives Disney’s Netflix killer a shit ton more content not to mention the back catalog of 20th Century Fox-branded TV shows (like Angel and Buffy and Futurama and The Simpsons, to name a few).

[…] might be yanked from Netflix as well. Moreover, while Iger wouldn’t comment on the reports of his company’s attempted buyout of 20th Century Fox his non-comment at least keeps investors’ hopes alive since it’s better than a […]